Recent Developments in Aviation Law

RECENT DEVELOPMENTS IN AVIATION LAW

John F. Easton and Jonathan D. Butler

I. Introduction ...... 301 II. Pretrial Proceedings ...... 302 A. Forum Non Conveniens ...... 302 B. Personal Jurisdiction ...... 303 C. Removals, Remands, and Transfers ...... 304 D. Preemption (Non–Warsaw Convention) ...... 308 E. Choice of Law ...... 313 III. Product Liability ...... 315 A. General Aviation Revitalization Act of 1994 ...... 315 B. Economic Loss Doctrine ...... 318 IV. Warsaw Convention ...... 321 A. Hague Protocol Amendment to Warsaw Convention ...... 321 B. Preemption ...... 322 C. Accident/No Accident ...... 323 D. Code-Sharing Liability ...... 324 E. Deep Vein Thrombosis ...... 324

i. introduction This survey focuses on important developments in aviation law from September 2005 to August 2006. The first part of this article examines opinions dealing with a variety of pretrial issues, including dismissal, removal and remand, and choice of law, particularly the significant choice of law decision in the American Airlines Flight 587 litigation. The second section analyzes product liability cases, including decisions involving the General Aviation Revitalization Act of 1994 and the economic loss rule.

John F. Easton is a partner in the Houston office of Pillsbury Winthrop Shaw Pittman, LLP. Jonathan D. Butler is an associate in the San Francisco office of Pillsbury Winthrop Shaw Pittman, LLP.

301 302 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

The last section reviews decisions interpreting the Warsaw Convention, including several opinions that may sound the death knell for Deep Vein Thrombosis cases involving international travel.

ii. pretrial proceedings A. Forum Non Conveniens King v. Cessna Aircraft Co.1 arose from the 2001 collision of a Cessna aircraft with a commercial flight taking off from Linate airport in Milan, Italy, when the Cessna crossed an active runway in dense fog. The collision killed 118 passengers and flight crew and injured four people on the ground. Cessna had chartered its flight as a demonstration for potential aircraft purchas- ers. The plaintiffs filed suit in the Southern District of Florida, alleging that Cessna was strictly liable for conducting the ultrahazardous activity of flying an aircraft in dense fog and directly liable for the negligent hiring and supervision of the chartered flight crew. All plaintiffs were European except Jack King, an American who was the first to file. Cessna moved to dismiss the case on grounds of forum non conveniens. The court initially denied the motion, then asked the parties for further briefing, and subsequently granted the motion as to all plaintiffs except King.2 The court also stayed King’s action pending resolution by the Italian courts.3 The court noted that “an adequate forum is usually found when ‘the defendant is amenable to process in that other forum.’”4 The court ruled that Italy was an adequate forum because Cessna was amenable to process in Italy and was willing to submit to the country’s jurisdiction.5 The court then considered various private interest factors, such as (1) access to evidence, (2) availability of witnesses, and (3) “all other practical problems” relating to the cost and convenience of trial.6 The court noted that the evidence for Cessna’s causation defense (based on intervening factors) “can only come from Italian witnesses, such as individuals working with air traf- fic control at the Linate airport.”7 The court further noted that it would have to adjudicate separately the liability and damages aspects of each Euro pean plaintiff’s case. Although King had nearly completed discovery, the European plaintiffs had barely begun conducting discovery. Finally, the court noted that the Italian proceedings were ongoing and the Court of

1. 405 F. Supp. 2d 1374 (S.D. Fla. 2005). 2. Id. at 1376, 1382. 3. Id. at 1381. 4. Id. at 1378 (quoting Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir. 2001)). 5. Id. 6. Id. (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). 7. Id. Recent Developments in Aviation Law 303

Milan was “the only forum where Plaintiffs will be able to resolve all of their claims in a single proceeding.”8 The court also considered various public interest factors, including “(1) the sovereigns’ interests in deciding the dispute, (2) the administrative burdens posed by trial, and (3) the need to apply foreign law.”9 The court noted that “both the United States and Italy have strong interests in deter- ring negligent conduct.”10 Moreover, if the court were to retain jurisdiction, it would need to decide up to nine issues of foreign law11—a finding that invoked the rule that “the need to resolve and apply foreign law should ‘point the trial court towards dismissal.’”12 Finally, the court noted that in a tort case, “the foreign country is ordinarily the best place to litigate a dispute revolving around a foreign rule of decision.”13 B. Personal Jurisdiction It is axiomatic that a preferred defense strategy, if available, is to seek dismissal for lack of personal jurisdiction. The defendant obtained such a dismissal in Selle v. Fayetteville Aviation, Inc.,14 which arose from the March 2003 crash in Georgia of an aircraft sold by an Indiana corporation (“Eagle Creek”) to a Tennessee corporation (“Haulers”). The Tennessee resident employed by Haulers to fly the aircraft died in the crash. The pilot’s wife sued in Tennessee state court for “strict liability, negligence, and breach of warranty in the manufacture, sale, and maintenance” of the aircraft. The court granted Eagle Creek’s motion to dismiss for lack of personal jurisdiction. 15 Eagle Creek sold the aircraft to Haulers in November 2001. The sale was negotiated over the phone, and the sales contract was mailed to Haulers in Tennessee, executed, and then mailed back to Eagle Creek in Indiana. The contract specified that Indiana law governed the sale and further provided that two new engines would be installed at a later date. In February 2002, Eagle Creek’s pilot flew the aircraft to Indiana for this engine installation.16 The plaintiff alleged that installation and maintenance of a defective fuel control unit caused the accident.17

8. Id. at 1378–79. 9. Id. at 1378 (quoting Warter v. Boston Sec., S.A., 380 F. Supp. 2d 1299, 1314 (S.D. Fla. 2004)). 10. Id. 11. Id. at 1379. 12. Id. (quoting Sigalas v. Lido Mar., Inc., 776 F.2d 1512, 1519 (11th Cir. 1985)). 13. Id. at 1380. 14. No. M2005-01185-COA-R3-CV, 2006 Tenn. App. LEXIS 335 (May 22, 2006). 15. Id. at *2. 16. Id. at *2–3. 17. Id. at *8–9. 304 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

The plaintiff argued that personal jurisdiction arose from the previous business relationship between Eagle Creek and Haulers, which involved several prior aircraft sales. The plaintiff also argued that Eagle Creek was the service center for seven aircraft registered in Tennessee, it had sold parts to fourteen aircraft companies in Tennessee, and it advertised in Tennessee through a national publication and the Internet.18 The court found that Eagle Creek was not subject to general personal jurisdiction in Tennessee, reasoning that its contacts with Tennessee were “irregular at best,” that most of Eagle Creek’s alleged misconduct occurred in Indiana, and that the plaintiff’s cause of action as the beneficiary origi- nated in Georgia, where the crash occurred.19 The court also found no basis for specific personal jurisdiction. There was no evidence that Eagle Creek had “purposely directed its activities to Tennessee residents.” Rather, its contacts with Tennessee were “the result of Haulers’ unilateral pursuit of Eagle Creek’s services.”20 Accordingly, the contract negotiations, aircraft sale, and engine installation were “insufficient to cause Eagle Creek to rea- sonably anticipate being haled into court in Tennessee.”21 C. Removals, Remands, and Transfers BRMS, LLC v. North American Flight Services22 involved several motions, including the defendant’s motion to transfer venue. The case arose from allegedly defective and incomplete repairs and service of a Beechcraft King Air turboprop airplane. BRMS, a Connecticut corporation, owned the aircraft, and the repairs and service were performed by North American Flight Services, a Federal Aviation Administration-licensed aviation and avionics repair station in New York. BRMS filed suit in Connecticut federal court, and North American moved to dismiss for improper venue and for lack of personal jurisdiction and, in the alternative, to transfer venue.23 BRMS had contacted North American in February 2005 regarding avionics upgrades that the Administration required by March 2005. After agreeing to terms, BRMS delivered its aircraft to North American’s facility in New York. Thereafter, the autopilot failed, allegedly due to North American’s replacement of certain avionics equipment. North Ameri- can proceeded with repairs on the autopilot over BRMS’s objection and charged BRMS for those repairs. North American could not fix the autopilot, and, at the time BRMS filed its complaint, the King Air’s autopilot allegedly still did not function.24

18. Id. at *3–4. 19. Id. at *7–11. 20. Id. at *15. 21. Id. at *15–16. 22. Case No. 3:05cv974 (JBA), 2006 U.S. Dist. LEXIS 28830 (D. Conn. May 12, 2006). 23. Id. at *1–3. 24. Id. at *3–7. Recent Developments in Aviation Law 305

Considering the venue question, the court found that the “center of gravity of this litigation is in New York” because most of the operative facts occurred there, at North American’s facility.25 The court noted that the weight given to BRMS’s choice of forum was diminished because most of the alleged tortious conduct occurred in New York.26 The court found that the convenience of the parties and witnesses, “‘the single most important factor’ in a § 1404(a) motion to transfer,” favored transfer because most of the important witnesses were located in New York.27 Further, because most nonparty witnesses were in New York, they were “beyond the subpoena power of this Court.”28 Documentary evidence appeared to be evenly divided between New York and Connecticut, so this factor was neutral in venue analysis.29 The court found it unnecessary to resolve which state’s law would be applied to the various claims because the choice of law issue was a close one and would not be controlling.30 Based on its overall analysis, the court found that “Connecticut does not have a particular interest in the outcome of this case sufficient to outweigh the other factors discussed above which conclusively favor transfer.”31 The court therefore granted North American’s motion to dismiss for improper venue and transferred the case to the Northern District of New York.32 McMahon v. Presidential Airways, Inc.,33 involved the defendant’s removal of air crash litigation to federal court. The plaintiffs brought suit under Florida state law as the survivors of three U.S. soldiers killed when their civilian aircraft crashed during a noncombat flight in Afghanistan. The plaintiffs alleged that the defendant contractors had negligently performed their contractual obligations by, inter alia, entrusting the aircraft to an in- experienced flight crew, failing to establish or supervise flight routes, and failing to properly equip the aircraft. The contractors removed the action to federal court, asserting three alternative bases for federal jurisdiction.34 First, the contractors contended that removal was proper under the federal officer removal statute35 because one of them (Presidential Airways (“PAWS”)) was acting under the direction of a federal officer.36 The court found that PAWS’s contract “describe[s] control by the Government over the way in which PAWS was to perform the contract.”37 The court found

25. Id. at *10. 26. Id. at *11. 27. Id. at *11–14. 28. Id. at *15. 29. Id. at *16–17. 30. Id. at *22–23. 31. Id. at *24. 32. Id. 33. 410 F. Supp. 2d 1189 (M.D. Fla. 2006). 34. Id. at 1192–93, 1195. 35. 28 U.S.C.A. § 1442 (2006). 36. McMahon, 410 F. Supp. 2d at 1195. 37. Id. at 1196. 306 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2) that PAWS also asserted two colorable federal defenses, including the government contractor defense and the combat exception to the Federal Tort Claims Act (“FTCA”).38 The court reasoned that the FTCA combat exception applied because the flight at issue involved transportation of ammunition and troops for military operations in Afghanistan.39 Further, the court observed that “‘at this stage of the litigation, there is no need to decide whether defendants will prevail on [any] of these defenses. The only issue is whether one or [more] of these defenses is colorable.’”40 Finally, the court found a causal nexus between the federal direction and PAWS’s conduct.41 Accordingly, the court ruled that PAWS satisfied the necessary elements for federal officer removal under § 1442.42 The court found it unnecessary to resolve the contractors’ contention that the state law claims were completely preempted “based on events involving the Defendants’ performance of functions traditionally performed by the military in a war region.”43 Finally, the contractors urged removal on the ground that the plaintiffs’ state law claims turned on substantial questions of federal law. The court agreed, finding that the plaintiffs’ claims “clearly raise substantial contested federal issues that support removal jurisdiction,” including civil liability for performance under a federal procurement contract. The court found that these substantial federal issues justified removal to federal court.44 Another recent decision approved the transfer of litigation to another court in the same federal district. Avco Corp. v. Progressive Steel Treating, Inc.,45 arose from the crash of a Piper aircraft in Mississippi, which seriously injured the pilot and destroyed the aircraft. The engine manufacturer, an unincorporated division of a Delaware corporation that maintained its principal place of business in Rhode Island, claimed that the accident was caused by a defective crankshaft gear bolt, jointly manufactured by Modern Plating and Progressive Steel. The engine manufacturer’s parent company, Avco, filed suit against the bolt manufacturers in the Eastern Division of the Northern District of Illinois, seeking recovery of settlement payments made to the pilot, his wife, and his aircraft insurer. Both defendants were Illinois corporations with their principal places of business in the Western Division of the Northern District of Illinois, and Modern Plating moved to

38. 28 U.S.C.A. § 2680(j) (2006); see McMahon, 410 F. Supp. 2d at 1197–98. 39. McMahon, 410 F. Supp. 2d at 1198–99. 40. Id. at 1197 (quoting In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 342 F. Supp. 2d 147, 158 (S.D.N.Y. 2004)). 41. Id. at 1199. 42. Id. at 1200. 43. Id. 44. Id. at 1201–02. 45. No.: 05 C 4364, 2005 U.S. Dist. LEXIS 22964 (N.D. Ill. Oct. 6, 2005). Recent Developments in Aviation Law 307 transfer the action to the Western Division pursuant to 28 U.S.C. § 1404 (a)-(b).46 In order to prevail on its motion to transfer, Modern Plating needed to demonstrate that “‘(1) venue is proper in the transferor district; (2) venue and jurisdiction are proper in the transferee district; and (3) the transfer will serve the convenience of the parties, the convenience of the witnesses, and the interests of justice.’”47 The court also noted that Modern Plating had “the further burden of establishing, ‘by reference to particular circumstances, that the transferee forum is clearly more convenient.’”48 The court considered the convenience of the parties and witnesses, which it called “the most important § 1404(a) factor.”49 This factor required the court to consider “four prongs: (1) the plaintiff’s choice of forum; (2) the site of material events; (3) availability of evidence in each forum; and (4) the parties’ convenience in litigating in the respective forums.”50 The court gave Avco’s choice of forum “only nominal deference” because its chosen forum (i) was not Avco’s home state and (ii) lacked substantial contact with the litigation.51 Second, the court noted that “the site of the defendants’ conduct relevant to this case weighs strongly in favor of transfer” because “any material acts they have undertaken in connection with this case took place in the Western Division” and because Avco failed to demonstrate that any material events took place in the Eastern Division.52 Third, based on the defendants’ location, the court found that “[t]o the extent that anticipated evidence is available in the Northern District, access in the Western Division is superior to the Eastern Division.”53 Fourth, the court found the parties’ convenience was a neutral factor because it made little difference to Avco or Modern Plating whether the case was tried in the Eastern or Western Division.54 As for convenience of the witnesses, the court noted that “this factor slightly favors transfer” because the defendants’ witnesses would have to travel farther for an action in the Eastern Division. The court rejected Avco’s argument that the Eastern District’s proximity to Chicago airports would enhance witness convenience, noting that access to central Chicago is not easy and travel to locations outside Chicago from those same airports is not onerous.55

46. Id. at *1–3. 47. Id. at *4 (quoting Schwarz v. Nat’l Van Lines, Inc., 317 F. Supp. 2d 829, 833 (N.D. Ill. 2004)). 48. Id. (quoting Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219–20 (7th Cir. 1986)). 49. Id. at *5. 50. Id. 51. Id. at *5–6. 52. Id. at *7. 53. Id. at *8. 54. Id. at *8–9. 55. Id. at *9–10. 308 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

Considering the “interest of justice” factor, the court noted that “defendants’ exclusive connections with the Western Division tip the scales in favor of transfer.”56 Finding that Modern Plating had met its burden of showing that the statutory factors all weighed in favor of transfer or were virtually neutral, the court granted its motion to transfer venue.57 D. Preemption (Non-Warsaw Convention) Educational malpractice claims (as part of aviation safety) are preempted by the Federal Aviation Act (“FAA”) and its corresponding regulations, according to the court in Sheesley v. Cessna Aircraft Co.58 The plaintiffs argued that the defendant, FlightSafety, a flight instruction school, negligently failed to teach the pilot the skills necessary to fly the aircraft that crashed and gave rise to this litigation.59 The court rejected this argument, finding that South Dakota does not recognize “educational malpractice” as a cognizable cause of action.60 The court observed, “With the lone exception of Montana, courts ‘have unanimously failed to recognize a cause of action for educational malpractice.’”61 The court also cited various public policy concerns: no standard clearly governed evaluations of flight training schools, causation was uncertain, schools could be exposed to a “flood of litigation,” and courts could become “embroiled” in school oversight.62 Moreover, even if educational malpractice were a cognizable claim, the court ruled that the plaintiffs’ negligence claims against FlightSafety were preempted. Although field preemption did not bar the plaintiffs’ negligence claims because “Congress did not intend to preempt the field of aviation safety when it adopted the [Federal Aviation] Act,”63 conflict preemption did bar their claims. Specifically, the court found “that federal aviation regulations, not a common law negligence standard, determine what emergency procedures FlightSafety must include in its course cur- riculum.”64 Accordingly, the court granted summary judgment to Flight- Safety on the plaintiffs’ educational malpractice claims. Courts continue to disagree as to whether federal law preempts the entire field of aviation safety. In contrast to the conclusion of the Sheesley court,65 the court in Duvall v. AVCO Corp.66 held that the FAA and the

56. Id. at *11. 57. Id. at *11–13. 58. No. CIV. 02-4185-KES, CIV. 03-5011-KES, CIV. 03-5063-KES, 2006 U.S. Dist. LEXIS 27133 (D.S.D. Apr. 20, 2006). 59. Id. at *46. 60. Id. at *52–56. 61. Id. at *52 (quoting Moore v. Vanderloo, 386 N.W.2d 108, 114 (Iowa 1986)). 62. Id. at *53–55. 63. Id. at *69. 64. Id. at *71. 65. Id. at *59–69. 66. No. 4:CV 05-1786, 2006 U.S. Dist. LEXIS 31445 (M.D. Pa. May 19, 2006). Recent Developments in Aviation Law 309

relevant regulations preempt the entire field. Duvall arose from the crash of a Cessna aircraft in transit through a mountainous area with limited visibility due to weather. The court addressed the plaintiff’s motion for voluntary dismissal and the defendants’ motion for reconsideration of the court’s previous holding as to the scope of Abdullah v. American Airlines.67 Granting both motions, the court held that in Abdullah, “[c]learly the Third Circuit intended to preempt the entire field of aviation safety, and not just aircraft operation.”68 In contrast to Duvall, the court in Monroe v. Cessna Aircraft Co.69 ruled that the FAA did not preempt the entire field of aviation safety. Monroe arose from the July 2003 crash of a Cessna aircraft in Texas that killed both occupants. The cause of the accident was alleged to be a bird strike that occurred just ten minutes after takeoff. The plaintiff alleged that Cessna failed to provide sufficient warning that a bird strike could cause in-flight structural damage, claiming Cessna was liable in both negligence and strict liability for its design and manufacture of the aircraft. Cessna moved to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Pro- cedure, arguing that the plaintiff’s tort-based state law claims were barred because Congress had preempted the entire field of aviation safety.70 The Monroe court denied Cessna’s motion to dismiss, finding that Con- gress had not impliedly preempted the field of aviation safety. The court noted, “Especially as to state regulation of matters of health and safety, ‘we start with the presumption that the historic police powers of the States were not to be superseded by the [federal law] unless that was the clear and manifest purpose of Congress.’”71 The court distinguished the Fifth Circuit decision in Witty v. Delta Airlines, Inc.,72 noting, “The Witty court did not hold that the entire field of aviation safety is preempted by the FAA” but rather that “Witty is a narrow opinion that only applies to warn- ings given to passengers on commercial airliners.”73 The court also distinguished City of Burbank v. Lockheed Air Terminal, Inc.,74 asserting that it “is a narrow decision holding that the field of aviation noise control, not the field of aviation safety, is preempted.”75 The court then examined the language and legislative history of the FAA but found no “evidence [of] an

67. 181 F.3d 363 (3d Cir. 1999); see Duvall, 2006 U.S. Dist. LEXIS 31445, at *3–5. 68. Duvall, 2006 U.S. Dist. LEXIS 31445, at *8 (citing Abdullah, 181 F.3d at 375). 69. 417 F. Supp. 2d 824 (E.D. Tex. 2006). 70. Id. at 826–27. 71. Id. at 827 (quoting Perry v. Mercedes Benz of N. Am., Inc., 957 F.2d 1257, 1261 (5th Cir. 1992)). 72. 366 F.3d 380 (5th Cir. 2004). 73. Monroe, 417 F. Supp. 2d at 829 (citing Witty, 366 F.3d at 384). 74. 411 U.S. 624, 638–40 (1973). 75. Monroe, 417 F. Supp. 2d at 829. 310 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2) intent by Congress to preempt the entire field of aviation safety.”76 Rather, the FAA “and its legislative history demonstrate an acknowledgement by Congress that state law tort claims are viable under the Act.”77 In Weiss v. El Al Israel Airlines, Ltd.,78 the court found that tort claims for “bumping” were preempted by the Airline Deregulation Act, but a breach of contract claim was not. Weiss involved passengers who were involun- tarily denied boarding on an overbooked international flight and placed on standby for two days. El Al Israel Airlines operated the flight from New York to Israel. The plaintiffs ultimately traveled on another airline but at the time of suit had not received a refund or any other compensation from El Al for being bumped from their reserved seats. The defendants moved to dismiss the claims, arguing that the plaintiffs’ claims were preempted under the Montreal Convention, the Airline Deregulation Act, and applicable federal regulations.79 The Weiss court first found that the plaintiffs’ claims for bumping were not preempted by the Montreal Convention, largely adopting the Sev- enth Circuit’s reasoning in Wolgel v. Mexicana Airlines.80 Wolgel addressed whether passengers’ claims for discriminatory bumping under the outbound leg of an international flight were barred under the Warsaw Convention’s two-year statute of limitations. The Wolgel court found the bumping claims were not barred because they alleged “complete nonperformance of the contract between the passenger and airline.”81 Finding additional support in the legislative history of the Montreal Convention, the Weiss court concluded that Article 19 does not include claims for bumping.82 The Weiss court next found that the plaintiffs’ tort claims for physical and emotional suffering were preempted by the Airline Deregulation Act (even though their contract claim was not).83 The court then dismissed the plaintiffs’ claim that El Al had violated 14 C.F.R. § 250.1 relating to over- selling practices, finding that the plaintiffs failed to state a claim because “there is no private remedy,” as opposed to a private right, “for violations of the provisions of th[ose] regulations,”84 as opposed to a private right. Accordingly, the plaintiffs’ regulatory violation claims were dismissed in their entirety.

76. Id. at 830. 77. Id. 78. 433 F. Supp. 2d 361 (S.D.N.Y. 2006). 79. Id. at 362–63. 80. 821 F.2d 442 (7th Cir. 1987). 81. See Weiss, 433 F. Supp. 2d at 366; Wolgel, 821 F.2d at 445 (Passengers were not “attempting to recover for injuries caused by their delay in getting to Acapulco. Rather their complaint [was] based on the fact that . . . they never left the airport.”). 82. Weiss, 433 F. Supp. 2d at 368–69. 83. Id. at 369–70 (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219 (1994)). 84. Id. at 371. Recent Developments in Aviation Law 311

Glorvigen v. Cirrus Design Corp.85 addressed whether “standard of care” claims are completely preempted under the FAA. In an action for damages arising from the crash of an aircraft designed, manufactured, and sold by the defendant, Cirrus, the federal district court remanded to state court the plaintiffs’ (decedents’) claims that Cirrus failed to provide adequate ground and flight training on the accident aircraft.86 The court rejected Cirrus’s contentions that the state law claims implicated significant federal questions and that the FAA completely preempts all state law claims relating to training.87 First, the court found no “federal issue significant enough to confer federal-question jurisdiction,” reasoning that “to confer federal-question jurisdiction over the state-law claims, the claims must involve ‘. . . a [substantial] contested federal issue . . .’ [that] must be dispositive and ‘at the heart of the state-law . . . claim.’”88 Although the case would address applicability of the Federal Aviation Regulations (“FARs”), the court noted that “alleged violation of the regulations will not necessarily resolve the state-law claims,” that the parties did not contest the meaning of any regulation, and, further, that Congress’s failure to preempt state law claims or to provide a federal cause of action indicated “that Congress did not intend to create a substantial federal question jurisdiction over cases implicating the FAA and FARs.”89 Second, the court rejected Cirrus’s argument that the state law claims relating to training were completely preempted. The court reasoned thus: For the doctrine of complete preemption to apply, Congress must have intended not only that the federal law preempts state law, but also that the federal law authorizes removal of actions seeking relief only under the state law. To have the requisite preemptive force to provide removal jurisdiction, a federal statute must provide both substantive and remedial provisions that supersede state law.90 Accordingly,

a federal substantive provision alone—although sufficient to provide a federal preemption defense—is insufficient to invoke the complete preemption

85. No. 05-2137 (PAM/RLE), No. 05-2137(PAM/RLE), 2006 U.S. Dist. LEXIS 8741 (D. Minn. Feb. 16, 2006). 86. Id. at *2–3, *19. 87. Id. at *9, *19. 88. Id. at *8 (quoting Grable & Sons Metal Prods. Inc. v. Darue Eng’g & Mfg., 125 S. Ct. 2363, 2367–71 (2005)). 89. Id. at *8–9. 90. Id. at *18 (citing Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6–8 (2003)). 312 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

doctrine. Rather, for the complete preemption doctrine to apply, the federal statute must also provide a remedial provision and clearly indicate that that provision is the exclusive remedy for the alleged harm.91

Because “[t]he FAA does not provide an express federal remedy for a violation of standard of care,” the court found that “complete preemption does not apply.”92 Further,“[b]ecause the FAA does not completely preempt the claims at issue, it cannot provide the basis for removal.”93 Henson v. Southwest Airlines, Inc.,94 addressed whether the Airline De- regulation Act preempts a passenger’s action for malicious prosecution. Henson purchased a one-way ticket to fly on Southwest Airlines from Mis- souri to Texas, paying with cash. After passing through security but before reaching his departure gate, Henson was detained and searched by agents of the Drug Enforcement Administration (“DEA”). He was not carrying any drugs, but the DEA agents found an unloaded handgun in Henson’s checked baggage, which he had not declared to Southwest’s ticket counter agent.95 The Federal Aviation Administration brought a civil enforcement action against Henson but later dropped the charges. Henson sued Southwest, alleging that its ticket counter agent had improperly targeted him as a drug courier and that he was the victim of “racial and pecuniary profiling.” Henson further alleged that the detention, search, and FAA administrative complaint were all precipitated by the ticket counter agent’s actions in targeting him. Henson asserted claims for malicious prosecution and for negligence.96 Southwest moved for summary judgment, arguing that the plaintiff’s claims were preempted by § 41713(b)(4)(A) of the Airline Deregulation Act (“ADA”), which preempts any state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier.”97 The Henson court cited another Texas decision, Delta Air Lines, Inc. v. Black,98 which addressed whether a passenger could bring state law claims against an airline after the passenger’s spouse was denied a first- class seat on an overbooked flight. In that case, the Texas Supreme Court noted, “If passengers were permitted to challenge airlines’ boarding procedures under state common law, the airline industry would potentially be

91. Id. at *18–19. 92. Id. at *19. 93. Id. 94. 180 S.W.3d 841 (Tex. App. 2005). 95. Id. at 842. 96. Id. at 842–43. 97. Id. at 844 (quoting 49 U.S.C. § 41713(b)(4)(A) and citing Morales v. Trans World Air Lines, Inc., 504 U.S. 374, 383 (1992)). 98. 116 S.W.3d 745 (Tex. 2003). Recent Developments in Aviation Law 313 subject to regulation by fifty different states.”99 Further, the Black plaintiff’s claims were “premised on the airline’s ticketing and boarding procedures, and therefore directly related to airline services.”100 The court found that Henson’s claims related to airline prices or service. Further, “the ticketing agent’s actions were based on mandatory federal aviation security screening regulations directly affecting airline services through ticketing and baggage-handling procedures.”101 The court further noted the distinction between the “violation of state-imposed obligations” alleged in Henson’s complaint and the situation where an airline breaches “its own, self-imposed obligations.”102 Accordingly, the appellate court ruled that § 41713(b)(4)(A) of the ADA preempted Henson’s claims, and it upheld the lower court’s grant of summary judgment in favor of Southwest Airlines.103 E. Choice of Law In re Air Crash at Belle Harbor, New York, on November 12, 2001,104 addressed whether admiralty law governs actions arising from international commercial flights. This action involved claims for, inter alia, wrongful death and property damage arising from the crash of American Airlines Flight 587. The aircraft vertical stabilizer was found in Jamaica Bay (a navigable waterway near New York City), and the aircraft itself crashed in the town of Belle Harbor, New York. All passengers and crew perished in the crash, along with five people on the ground. The Judicial Panel on Multidistrict Litigation consolidated the various claims in the Southern District of New York, and the defendants Airbus and American moved for a determi- nation of applicable law.105 The court ruled at the threshold that it had authority as the transferee multidistrict litigation forum to resolve choice of law questions.106 The plaintiffs argued that admiralty jurisdiction applied to the passengers’ claims because the vertical stabilizer separated from the aircraft over navigable waters. The defendants disagreed, arguing that admiralty jurisdiction should not apply because Flight 587 crashed on land. The court agreed with the plaintiffs, finding that Flight 587 satisfied the two prongs required for admiralty jurisdiction: a maritime nexus and a maritime locality.107 Flight 587 met the maritime nexus prong because it came within the

99. Id. at 756, quoted in Henson, 180 S.W.3d at 845. 100. Henson, 180 S.W.3d at 845–46 (citing Black, 116 S.W.3d at 756). 101. Id. at 846 (citing Black, 116 S.W.3d at 752–53). 102. Id. at 847 (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 228 (1995)). 103. Id. 104. 2006 U.S. Dist. LEXIS 27387 (S.D.N.Y. May 9, 2006). 105. Id. at *1–3. 106. Id. at *17–21. 107. Id. at *31–32, 38–39. 314 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2) class of incidents that has a “potential impact” on maritime commerce and because it was a transoceanic flight that had a “significant relationship” to traditional “maritime activity.”108 Likewise, the court found that Flight 587 met the maritime locality prong because the aircraft broke up over water, and the maritime location was not fortuitous given that the majority of the flight was to occur over water.109 Exercising admiralty jurisdiction, the court applied substantive admiralty law.110 Because no admiralty statute governed the deaths of non- seamen in state territorial waters, the court ruled that the passengers’ claims were governed by the standard for general maritime wrongful death actions articulated in Moragne v. States Marine Lines.111 The court further ruled that state law could supplement compensatory damages under Moragne. Although New York law would normally supplement the passengers’ damages under admiralty choice of law, New York does not permit recovery of nonpecuniary damages such as damages for loss of society, whereas a Moragne action does. To resolve this conflict, the court applied general maritime law, which permits recovery of such damages.112 The court also considered whether the plaintiffs could recover punitive damages against the manufacturer under admiralty law. The court concluded that “plaintiffs who are entitled to seek non-pecuniary damages for loss of society should be allowed to seek non-pecuniary punitive damages.”113 The court also considered whether it should apply dépeçage,114 a principle that would require a separate choice of law inquiry for punitive damages.115 French law might be applicable as to punitive damages because France, the location of Airbus’s principal place of business and of its alleged misconduct in designing and manufacturing the aircraft, had the strongest interest in applying its law to conduct-regulating issues such as punitive damages.116 The court reasoned that the two most important factors under admiralty choice of law are a defendant’s principal place of business and the place of its alleged misconduct. However, the court deferred ruling on the law applicable to punitive damages due to the parties’ dispute as to where the relevant conduct occurred.117

108. Id. at *32. 109. Id. at *38–39. 110. Id. at *39. 111. 398 U.S. 375 (1970); see 2006 U.S. Dist. LEXIS 27387 at *44. 112. 2006 U.S. Dist. LEXIS 27387 at *53–54. 113. Id. at *72. 114. Dépeçage “‘recognizes that in a single action different states may have different degrees of interests with respect to different operative facts and elements of a claim or defense.’” Id. (quoting Simon v. Philip Morris, Inc., 124 F. Supp. 2d 46, 75 (E.D.N.Y. 2000)). 115. Id. 116. It was undisputed that French law does not recognize punitive damages. 117. 2006 U.S. Dist. LEXIS 27387, at *80–82. Recent Developments in Aviation Law 315

Turning to the ground victims’ claims, the parties did not dispute that New York law applied to their compensatory damages claims. The court considered whether the ground victims’ punitive damages claims were governed by the law of France. The court held that New York law applied to the ground victims’ punitive damages claims. The court reasoned that those claims fell within its diversity jurisdiction, meaning they were governed by the choice of law rules of the forum state, New York. New York applies the lex loci delicti rule (law of the place of tort), which requires the court to determine where the tort “occurred.” The court reasoned that the “last event necessary” test leads to New York law because the accident situs was the place of the last event necessary to make Airbus liable for this accident to occur.118 The court further reasoned that this ruling was not inconsistent with its ruling that French law may govern the passengers’ punitive damages claims against Airbus: “Unlike the passengers, the ground victims had no relationship with the Defendants until tragedy struck and the Aircraft or one of its engines fell upon their property.”119

iii. product liability A. General Aviation Revitalization Act of 1994 Sheesley120 addressed the statute of repose in the General Aviation Revital- ization Act of 1994 (“GARA”).121 A Cessna-340A crashed in South Dakota on August 23, 2000, killing all three on board. The ensuing litigation and investigation focused on pilot error and the allegedly defective installation of a replacement “wastegate elbow” on the aircraft’s left engine in 1986.122 The district court considered the repose defense raised in separate motions for summary judgment by the defendants, Cessna and Teledyne. Cessna argued that the action was barred by the eighteen-year statute of repose because the aircraft was manufactured in 1977, more than eighteen years before the mishap.123 Teledyne argued that it could not be held liable because the two engines were manufactured more than eighteen years before the accident.124 In response to Cessna, the plaintiffs argued that under GARA’s rolling provision, the trigger date should be in 1986, when Cessna allegedly manufactured the replacement engine part.125 The court found that the plaintiffs had presented sufficient evidence to create a genuine issue of

118. Id. at *90. 119. Id. at *96–97. 120. No. Civ. 02-4185-KES, 2006 U.S. Dist. LEXIS 27133 (D.S.D. Apr. 20, 2006). 121. 49 U.S.C.A. § 40101 n. (West Supp. 2005). 122. 2006 U.S. Dist. LEXIS 27133, at *5, 10–11, 15. 123. Id. at *15. 124. Id. at *35–36. 125. Id. at *17–18. 316 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2) material fact as to whether Cessna had manufactured the replacement part in 1986 and so ruled that “GARA does not bar plaintiffs’ claims against Cessna.”126 The court further considered and rejected the plaintiffs’ alternative argument that Cessna was subject to GARA’s rolling provision because “the holder of a type certificate is always considered the manufacturer of a defective part.”127 The court rejected the argument, finding that Congress intended to allow rolling of the repose period only against the actual manufacturer of the defective part.128 The plaintiffs also asserted that Cessna could not invoke the statute of repose because it had misrepresented or concealed information from the Federal Aviation Administration in relation to the aircraft exhaust system.129 The court rejected the argument because the plaintiffs had produced no evidence of concealment.130 In sum, the court ruled that Cessna was not protected by the eighteen-year statute of repose because it appeared that the allegedly defective component may have been manufactured by Cessna and replaced on the aircraft within the preceding eighteen years.131 In response to Teledyne, the plaintiffs argued that GARA’s rolling provision should apply because the replacement of the wastegate elbow in the engines restarted the repose period. The court disagreed, noting that Tele- dyne had manufactured the engines but not the wastegate elbow itself.132 “[E]ven if the wastegate elbow is considered a component part of the engine, this does not roll the repose period applicable to the entire engine.”133 The plaintiffs also argued that the rolling provision should apply because Teledyne had misrepresented, concealed, or withheld information from the Administration, but the court found this unsupported by evidence. Because the rolling provision did not apply with respect to the engines, the court granted Teledyne’s motion for summary judgment.134 The court next turned to the summary judgment motion by Textron, Cessna’s parent corporation. Textron argued that a parent corporation is not liable for tortious acts by a separate, subsidiary corporation and that no evidence justified “piercing the corporate veil.” The court agreed and granted Textron’s motion for summary judgment.135

126. Id. at *18–19. 127. Id. at *19. 128. Id. at *22–23. 129. Id. at *27. 130. Id. at *28–35; see id. at *33 (“All the evidence establishes that Cessna consistently worked in conjunction with the FAA to rectify the exhaust system problem. . . .”). 131. Id. at *18–19, 35. 132. Id. at *36–37. 133. Id. at *36. 134. Id. at *37. 135. Id. at *38–40. Recent Developments in Aviation Law 317

Blazevska v. Raytheon Aircraft Co.136 addressed whether GARA may bar claims arising from an overseas crash. On February 26, 2004, a Beechcraft Super King Air 300 crashed in Bosnia while flying there from Macedo- nia. Eight passengers died, all of them Macedonian residents. The aircraft was manufactured by Beech Aircraft Corporation, which later became Ray- theon Aircraft Company, a Kansas corporation. It was undisputed that Ray theon did not maintain, operate, modify, repair, or have possession of the aircraft after its initial overseas delivery in 1980. The plaintiffs invoked diversity jurisdiction and claimed that Raytheon’s design and/or manufacture were defective because the aircraft was not sufficiently crashworthy. Raytheon moved for summary judgment, arguing that the claims were barred by GARA’s eighteen-year statute of repose. The plaintiffs responded that GARA does not apply due to the presumption against extraterritoriality.137 The court granted summary judgment in favor of Raytheon.138 The court noted that GARA is “a statute of repose generally limiting aircraft manufacturers’ liability for accidents to those occurring within eighteen years of the first delivery of the airplane.”139 Although four exceptions and a “rolling” feature could extend the eighteen-year period of liability, no exception applied in this case.140 As for the presumption against extraterritoriality, the court noted that “[t]here is a ‘longstanding principle of American law that legislation is presumed to apply only within the territorial jurisdiction of the United States unless the contrary affirmative intention of Congress is clearly expressed.’”141 The court construed this principle as requiring a two-step analysis: (1) whether the presumption applies because the conduct at issue occurred beyond U.S. borders; and (2) if so, “whether there is ‘clear evidence of congressional intent to apply’ the statute extraterritorially.”142 On the first step, the plaintiffs argued that the relevant conduct was the event at issue, the plane crash in Bosnia, whereas the defendants argued that the relevant conduct was the allegedly defective design and manufacture of the aircraft, which occurred in the United States. The court followed analogous reasoning from Environmental Defense Fund, Inc. v. Massey,143 in which the D.C. Circuit ruled that “when the activity regulated by the statute occurs primarily within the United States, the presumption [against

136. 2006 U.S. Dist. LEXIS 32170 (N.D. Cal. May 12, 2006). 137. Id. at *3–4. 138. Id. at *23. 139. Id. at *6 (citing Lyon v. Agusta S.P.A., 252 F.3d 1078, 1084 (9th Cir. 2001); GARA § 2(a)(1)). 140. Id. at *7. 141. Id. at *8 (quoting Arc Ecology v. U.S. Dept. of the Air Force, 411 F.3d 1092, 1097 (9th Cir. 2005)). 142. Id. at *14–15 (quoting Arc Ecology, 411 F.3d at 1098 n.2). 143. 986 F.2d 528 (D.C. Cir. 1993). 318 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2) extraterritoriality] does not apply ‘[e]ven where the significant effects of the regulated conduct are felt outside the U.S.’”144 Based on this reasoning, the court ruled that GARA was “designed to regulate conduct—the filing of civil lawsuits—in the United States and imposes no substantive requirements which could be interpreted to govern conduct abroad . . . [so] the presumption against extraterritoriality does not apply in this case because the conduct GARA regulates is inherently domestic.”145 Accord- ingly, the court granted summary judgment in favor of Raytheon because GARA applied to bar the plaintiffs’ claims.146 B. Economic Loss Doctrine Isla Nena Air Services, Inc. v. Cessna Aircraft147 addressed whether an aircraft owner was barred from recovering damages against manufacturers under the economic loss doctrine. On August 30, 2003, a Cessna 208B experienced an in-flight engine failure while carrying nine passengers just off the coast of Puerto Rico. Although the pilot was able to make a controlled emergency water landing and the passengers escaped any serious injury, the aircraft sustained serious damage and its engine was destroyed. The aircraft owner, Isla Nena Air Services, brought suit against Cessna and the engine manufacturer, Pratt & Whitney Canada (“PWC”). PWC confirmed that the engine failed due to damage that “was consistent with ingestion of a foreign object.” Isla Nena’s claims for strict liability and negligence alleged that the rivets around the engine inlet duct were de- fectively designed or installed, which caused them to break off and led to engine failure after the engine ingested one of the rivets.148 The district court granted PWC’s motion to dismiss, ruling that admiralty jurisdiction applied and that Isla Nena’s tort claims were barred by the economic loss doctrine. The district court also ruled that the economic loss doctrine would bar Isla Nena’s claims even if Puerto Rico law applied instead of admiralty law, finding that Puerto Rico law would follow the economic loss doctrine.149 On appeal, the First Circuit, without addressing whether admiralty jurisdiction applied in this case, affirmed on the basis that Puerto Rico would adhere to the economic loss doctrine.150 The court began by noting, “Under the economic loss rule as articulated by the United States Supreme Court, a party generally may not recover damages in tort if a defective product damages only itself.”151 The court

144. 2006 U.S. Dist. LEXIS 32170 at *16–17 (quoting Massey, 986 F.2d at 531). 145. Id. at *18. 146. Id. at *23. 147. 449 F.3d 85 (1st Cir. 2006). 148. Id. at 86. 149. Id. at 87. 150. Id. at 88, 92. 151. Id. at 87 (citing E. River S.S. Corp. v. Transam. Delaval, Inc., 476 U.S. 858, 876 (1986)). Recent Developments in Aviation Law 319 then noted that “East River is an admiralty case; therefore, if we were to apply federal admiralty law, Isla Nena’s claims would be barred by the economic loss rule.”152 Rather than address federal admiralty law, however, the court focused on the question of first impression as to whether the Supreme Court of Puerto Rico would rule that the economic loss rule applies.153 The court first noted that Puerto Rico’s negligence statute, Article 1802 of Puerto Rico’s Civil Code, provides thus: “A person who by an act or omission causes damage to another party through fault or negligence shall be obliged to repair the damage so done.”154 Turning to case law constru- ing Puerto Rico law, the court then noted that “Puerto Rico’s negligence statute . . . does not apply in the context of a commercial transaction.”155 Relying on Betancourt v. W.D. Schock Corp., the court found that “the plaintiff could not re-label what was in essence a warranty action as a tort action.”156 Accordingly, under Betancourt, Article 1802 would not apply to Isla Nena’s damages claims, which arose from a commercial transaction.157 Citing two cases, Marquez v. Torres Campos158 and Ramos Lozada v. Ori- entalist Rattan Furniture, Inc.,159 Isla Nena argued that Betancourt should not apply and that, “under the doctrine of concurrence of actions, a party may elect which cause of action to bring if the party has a choice between valid contract and tort claims.”160 The court distinguished Marquez on the basis that the plaintiff’s claims in that case were premised on a theory of contractual deceit, whereas Isla Nena asserted claims “squarely inside ‘the frame of the concept of warranty.’”161 The court distinguished Ramos Lozada on the grounds that it involved a lessor-lessee relationship and not a commercial transaction, that Ramos Lozada did not implicate the economic loss rule, and that Ramos Lozada expressly noted that “a party may not choose whether to proceed in contract or tort ‘when the damage suffered exclusively arises as a consequence of the breach of an obligation specifically agreed upon, which damage would not occur without the existence of a contract.’”162 On this basis, the court found that Betancourt applied and Article 1802 did not. Focusing on Isla Nena’s strict liability claims, the court then noted that its ruling was reinforced by the evolution in Puerto Rico of the strict

152. Id. at 87–88. 153. Id. at 88. 154. Id. (citing 31 P.R. Laws Ann. tit. 31, § 5141) (2004). 155. Id. (citing Betancourt v. W.D. Schock Corp., 907 F.2d 1251, 1255 (1st Cir. 1990)). 156. Id. 157. Id. at 88–89. 158. 11 P.R. Offic. Trans. 1085, 11 P.R. Dec. 854 (1982). 159. 130 P.R. Dec. 712 (1992). 160. Isla Nena Air Servs., 449 F.3d at 89. 161. Id. (citing Marquez, 11 P.R. Offic. Trans. at 1105). 162. Id. at 90 (citing Ramos Lozada, 130 P.R. Dec. at *8; Nieves Domenech v. Dymax Corp., 952 F. Supp. 57, 66 (D.P.R. 1996)). 320 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

liability doctrine.163 “[T]he Puerto Rico Supreme Court has consistently relied upon the precedent of the California Supreme Court for its strict liability jurisprudence.”164 The court then cited Seely v. White Motor Co.,165 in which “the California Supreme Court held that a party could not recover in tort—under either negligence or strict liability theories—if a defective product damaged only itself.”166 The court then held that the majority common law view, including the view of the California Supreme Court, is that a party may not recover in strict liability if a product’s defect damages only the product itself. . . . [W]e think it clear that the Puerto Rico Supreme Court would hold that the economic loss rule bars Isla Nena’s strict liability claims.167 Turbomeca, S.A. v. French Aircraft Agency, Inc.,168 addressed whether the economic loss doctrine barred an owner from recovering damages against engine manufacturers. This case arose from the crash of a helicopter owned by French Aircraft Agency, Inc., six days after a mechanic removed and improperly reinstalled a “fuel flow limiter” on the helicopter’s engine. The engine and the fuel filter were both manufactured by Turbomeca. The mechanic had removed the fuel filter to inspect the aircraft for mechanical problems, and, finding none, he reinstalled the fuel filter upside down. Although the pilot and two passengers survived the accident, the helicopter was a complete loss. The pilot and passengers filed suit against the mechanic, the helicopter manufacturer, French Aircraft, and Turbomeca. In turn, French Aircraft filed a third-party action for contribution against Turbomeca on the grounds that the fuel filter was defective. Turbomeca subsequently entered into an agreement with French Aircraft “to sever and defer the third party action pending the outcome of the [pilot and passenger] litigation.”169 After Turbomeca was granted summary judgment on the pilot and passenger suit, French Aircraft was absolved of liability by the jury.170 After the pilot and passenger suit, French Aircraft’s third-party action against Turbomeca was mediated. During mediation, the parties agreed to arbitrate with the stipulation that any award was subject to judicial review as to all issues of law. The arbitration panel found that Turbomeca was twenty-five percent at fault and awarded damages plus interest to

163. Id. at 91. 164. Id. at 92 (citing Collazo-Santiago v. Toyota Motor Corp., 149 F.3d 23, 25 (1st Cir. 1998)). 165. 403 P.2d 145 (Cal. 1965). 166. Isla Nena Air Servs., 449 F.3d at 92 (citing Seely, 403 P.2d at 150–51; E. River S.S. Corp. v. Transam. Delavel, Inc., 476 U.S. 858, 868 (1986)). 167. Id. at 92. 168. 913 So. 2d 714 (Fla. Dist. Ct. App. 2005). 169. Id. 170. Id. at 716. Recent Developments in Aviation Law 321

French Aircraft. The trial court denied Turbomeca’s motion to vacate the arbitration award, confirmed the award, and entered final judgment. The court also conducted an evidentiary hearing on French Aircraft’s motion to tax costs and then entered a cost judgment against Turbomeca for costs incurred by French Aircraft during the arbitration.171 On appeal, Turbomeca successfully argued that the award for damages for loss of the helicopter was barred by the economic loss doctrine.172 The court of appeals noted that “French Aircraft has suffered a purely economic loss due to what it alleges is a defective product. It cannot recover for this loss under tort theories.”173 This conclusion flowed from the Florida rule that “[a] manufacturer in a commercial relationship has no duty under either negligence or strict product-liability to prevent a product from in- juring itself.”174 Further, the court noted that “[p]hysical injuries to third parties [the pilot and passengers] is insufficient to satisfy this economic loss rule exception. French Aircraft does not stand in any relation to the injured parties to be able to assert their injuries to satisfy this requirement.”175 The court also noted that “no other property was harmed. The airframe and engine are not two separate pieces of property—they are one product.”176 The court cited supporting decisions and quoted an “analogous case” for the rule that a “helicopter and engine, along with the fitting, constitute a single product for purposes of the economic loss doctrine.”177 Based on this reasoning, the appellate court vacated the damages award. The court also reversed the cost award in favor of French Aircraft, finding that the trial court erred as a matter of law by awarding costs that were not provided for by either the parties’ stipulation or the arbitration award.178

iv. warsaw convention A. Hague Protocol Amendment to Warsaw Convention Avero Belgium Insurance v. American Airlines, Inc.,179 involved a subrogation claim brought by the shipper’s underwriter for recovery of goods lost in international air travel. “The waybill listed Chicago as the only stop en route, but, due to rescheduling, the cargo [in question] was shipped through Dallas,” and only one of the five crates arrived at its destination in Tulsa.

171. Id. 172. Id. 173. Id. 174. Id. (quoting Indemnity Ins. Co. v. Am. Aviation, Inc., 891 So. 2d 532, 540 (Fla. 2004)). 175. Id. 176. Id. at 717. 177. Id. (quoting Va. Sur. Co. v. Am. Eurocopter Corp., 955 F. Supp. 1213, 1216 (D. Haw. 1996)). 178. Id. 179. 423 F.3d 73 (2d Cir. 2005). 322 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

“American Airlines, Inc. . . . [had] issued an air waybill to Asco Industries, N.V. . . . for the carriage of five crates from Brussels, Belgium to Tulsa, Oklahoma.”180 The defendant’s liability hinged on which version of the Convention was in effect on March 9, 2001, the day the waybill was issued. American “maintained . . . its liability for the lost crates was limited to $20 per kilogram by Article 22(2) of the Original Warsaw Convention.” The plaintiff coun- tered by arguing that in order to take advantage of Article 22(2), the defendant had to comply with the requirements of Articles 9 and 8(c) and that the defendant had not done so. The “[d]efendant replied that in 2001 the United States and Belgium both adhered . . . to the amended version [of the Warsaw Convention] adopted by The Hague Protocol of 1955,” which “deleted most of the ‘air consignment note’ requirements of the Original Warsaw Convention,” thereby limiting the defendant’s liability pursuant to the treaty. The district court denied the plaintiff’s motion for partial summary judgment, effectively ruling that the airline could invoke the liability limitation because the United States had acceded to The Hague Protocol when it ratified Montreal Protocol No. 4 in 1998. The appellate court considered the question of whether the United States became a party to The Hague Protocol of 1955, which amended the Warsaw Convention, after the Senate consented to the Protocol’s ratification on July 31, 2003.181 The court held “that the United States did not become a party to The Hague Protocol until after the Senate consented to the Protocol’s ratification on July 31, 2003,” and therefore the original Warsaw Convention governed the dispute.182 The court decided that the United States had not acceded to the provisions of The Hague Protocol by virtue of its ratification of Montreal Protocol No. 4 in 1998. Accordingly, American’s liability would not be limited by Article 22(3) of the original Warsaw Convention. B. Preemption The plaintiff in Kalantar v. Lufthansa German Airlines183 sued the airline, seeking damages arising from the airline’s refusal to allow him on the aircraft unless he agreed to a hand search of his luggage and for having him arrested. Kalantar brought claims under both federal and state law.184 After the court ruled that Article 17 of the Warsaw Convention did not preempt Kalantar’s claims, the defendants sought summary judgment on all counts.185

180. Id. at 76. 181. Id. 182. Id. at 86. 183. 402 F. Supp. 2d 130 (D.D.C. 2005). 184. Id. at 135–36. 185. Id. at 136. Recent Developments in Aviation Law 323

Kalantar asserted a claim under Article 1 of the Warsaw Convention.186 The court held that Kalantar clearly had a claim for the delay in his travel under Article 19 of the Convention.187 However, the court further held that Kalantar had not provided any evidence to support his claim because his injuries stemmed from his arrest and detention, not from the delay in his travel itinerary. His claim under the Warsaw Convention was dismissed.188 The plaintiff in Mraz v. Lufthansa German Airlines189 sued the airlines for alleged damages when his mother-in-law was “bumped” from a Luf- thansa flight. Lufthansa successfully removed the action to federal court on the grounds that the claims arose under the Warsaw Convention and then moved to dismiss the action on what the court termed “state law grounds.” The inconsistency between the motion for summary judgment and the removal caused the court to reexamine whether or not federal question jurisdiction over the dispute truly existed. The court found it unclear whether Mraz’s claims fell within the scope of Article 19.190 The court also found it unclear whether the complete preemption doctrine applied to Mraz’s claims. The court ordered the parties to brief these two issues due to the lack of clarity.191 C. Accident/No Accident The plaintiff in Garcia Ramos v. Transmeridian Airlines, Inc.,192 fractured her arm in two places when another passenger fell on her while attempting to cross in front of the plaintiff to reach the window seat. The court held this was an unexpected or unusual event, satisfying the first prong of the Warsaw “accident” analysis.193 However, the court held that the incident had no relation to the operation of the aircraft.194 The court concluded that because the assistance of the flight crew was never sought and because there was nothing about the circumstances that would naturally require the assistance of the crew, there was no malfunction or abnormality in the aircraft’s operation.195 The court then dismissed the plaintiff’s claim for emotional damages because such claims are unavailable under the War- saw Convention.196 The court also dismissed the plaintiff’s state law claims based on preemption.197

186. Id. at 139. 187. Id. at 140. 188. Id. 189. 2006 WL 267361 (E.D.N.Y. Feb. 2, 2006). 190. Id. at *2. 191. Id. 192. 385 F. Supp. 2d 137 (D.P.R. 2005). 193. Id. at 141–42. 194. Id. at 143. 195. Id. 196. Id. 197. Id. 324 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

D. Code-Sharing Liability In Ramirez v. United Airlines, Inc.,198 the court addressed whether or not the existence of a code-sharing agreement allows an inference that the airline not operating the flight can be considered a “carrier” under the Warsaw Convention. A passenger brought suit against United Airlines and Mexicana Airlines for damages allegedly suffered during a turbulent flight from Los Angeles to Mexico City.199 United moved to dismiss the claims on grounds that the plaintiff failed to state a claim under the Convention and that the Convention barred the plaintiff’s negligence claim.200 United and Mexicana Airlines had a code-sharing agreement, and the plaintiff purchased her tickets from United. However, Mexicana operated the flight from Los Angeles to Mexico City.201 The court granted United’s motion to dismiss, holding that the existence of a code-sharing agreement does not lead to the inference that United was the carrier of the flight at issue.202 The court further held that the plaintiff’s state law negligence claim was preempted by the Convention.203 E. Deep Vein Thrombosis The plaintiff in Caman v. Continental Airlines, Inc.204 flew on Continental Airlines from Los Angeles to Paris and thereafter was diagnosed with Deep Vein Thrombosis (“DVT”). The plaintiff did not request assistance from Continental personnel but upon arrival noticed symptoms and sought medical attention. The airline did not warn the plaintiff of the risk of DVT, and the plaintiff alleged that this failure to warn constituted an “accident” for purposes of establishing liability under Article 17 of the Warsaw Convention.205 The district court granted summary judgment in favor of Continental, and the Ninth Circuit affirmed. The Ninth Circuit began by noting, “It is well settled that the development of DVT as the result of international air travel, without more, does not constitute an ‘accident’ for purposes of Article 17 liability.”206 The court cited the rule that the “conditions precedent to Article 17 liability are as follows: (1) an unexpected or unusual event; (2) external to the passenger;

198. 416 F. Supp. 2d 792 (N.D. Cal. 2005). 199. Id. at 794. 200. Id. 201. Id. 202. Id. at 796 (citing Shirobokova v. CSA Czech Airlines, Inc., 376 F. Supp. 2d 439 (S.D.N.Y. 2005)). 203. Id. at 797. 204. 455 F.3d 1087 (9th Cir. 2006). 205. Id. at 1089. 206. Id. (citing Rodriguez v. Ansett Austl. Ltd., 383 F.3d 914, 919 (9th Cir. 2004); Scherer v. Pan Am. World Airways, Inc., 387 N.Y.S.2d 580, 581 (App. Div. 1976)). Recent Developments in Aviation Law 325

(3) that causes the plaintiff’s injury.”207 The court then examined whether the failure to warn of the risk of DVT (as opposed to the development of DVT itself) could constitute an “accident” for purposes of Article 17.208 The court compared Article 17, which delineates an air carrier’s liability for damages sustained by passengers as the result of an accident, against Article 20, which provides that “[t]he carrier shall not be liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.”209 The court then reasoned that the focus of the inquiry should not be shifted from the nature of the event that caused the injury to the alleged failure of the air carrier to avert it. In addition, interpreting the term accident to include a failure to warn would incorporate into Article 17 “an inquiry that is properly left to analysis under Article 20(1) once it has been estab- lished that an accident has occurred.”210 On this basis, the Ninth Circuit held that “Continental’s failure to warn Caman of DVT is not an ‘event’ as that term is discussed in Saks and Husain. Rather, Continental’s failure to warn was an act of omission. . . .”211 Accordingly, the court ruled that the failure to warn of the risk of developing DVT is not an accident under Article 17. In Blotteaux v. Qantas Airways, Ltd.,212 the court reinforced its previous decision that no “accident” under the Warsaw Convention occurs when an airline passenger develops DVT under normal flight conditions. The court rejected Blotteaux’s argument that his development of DVT was an accident under Article 17 of the Warsaw Convention. The court followed the rationale of Air France v. Saks, holding that there was no accident because nothing unusual occurred aboard the flight and that Blotteaux’s development of DVT was triggered by his own internal reaction to normal flight operation.213 The court distinguished Olympic Airways v. Husain on the basis that flight personnel were not asked to assist Blotteaux in any way and were not even notified of any discomfort on his part.214 The court further found no factual basis for Blotteaux’s claim that Qantas failed to adequately warn him about the danger of DVT because Qantas provided video, audio, and written materials concerning the risk of DVT.215

207. Id. at 1090 (citing Air Fr. v. Saks, 470 U.S. 392, 405 (1985); Rodriguez, 383 F.3d at 917)). 208. Id. at 1091. 209. Id. at 1091–92 (citing Warsaw Convention art. 20, 49 Stat. 3019). 210. Id. at 1092 (citing Olympic Airways v. Husain, 540 U.S. 644, 649 n.5 (2004)). 211. Id. 212. 171 Fed. Appx. 566 (9th Cir. 2006). 213. Id. at 569 (citing Air Fr. v. Saks, 470 U.S. 392 (1985)). 214. Id. (citing Olympic Airways v. Husain, 540 U.S. 644 (2004)). 215. Id. at 569–70. 326 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)

Finally, in Deep Vein Thrombosis & Air Travel Group Litigation,216 the Judicial Committee of the House of Lords unanimously affirmed the court of appeals’ holding that the onset of DVT during the course of international travel is not an Article 17 accident. The Judicial Committee adopted the definition of accident from Saks217 as “an unexpected and unusual event or happening that is external to the passenger.”218 The definition in Saks dis- tinguishes between the bodily injury on the one hand and the “accident” that caused the bodily injury.219 Therefore, where the flights were normal and unremarkable, there was no unexpected or unusual event external to the passengers that caused their DVT. The Judicial Committee rejected the plaintiffs’ arguments concerning the failure to warn of the risk of DVT because both the industry and the defendant airlines’ practice did not include warning of the dangers of DVT.220 The Judicial Committee further rejected the “deep pocket” tort law theory stating that an economic analysis is not permitted under the Warsaw Convention.221 Finally, the Judicial Committee distinguished Husain,222 wherein the passenger and his wife had several times asked to be moved farther away from the smoking section. In that case, there was an intervention, the flight attendant’s refusal to allow the passenger to move to a seat farther away from the smoking section, creating a link in the causal chain. No intervening event occurs in DVT cases.223 The Judicial Committee held that the two requirements in the Saks definition “rule[d] out [A]rticle 17 recovery in DVT cases where no more can be said than that the cramped seating arrangements in the aircraft were a causative link in the onset of the DVT.”224

216. [2005] UKHL 72, [2006] 1 A.C. 495. 217. 470 U.S. 392 (1985). 218. Id. at 404. 219. [2005] UKHL 72, ¶¶ 14–16, [2006] 1 A.C. 495, 504. 220. Id. at 506, ¶ 24. 221. Id. at 508, ¶ 31. 222. 124 S. Ct. 1221 (2004). 223. See [2005] UKHL 72, ¶¶ 21–22, [2006] 1 A.C. 495, 505–06. 224. Id. at 506, ¶¶ 23–24.